Foreign exchange reserves of India decline to 5-month low

Mumbai: Foreign exchange reserves of India fell to 5-month low dollars in the week ended on December 6. The Weekly Statistical Supplement released by the Reserve Bank of India (RBI) revealed this.

As per RBI data, India’s forex reserves declined by $3.23 billion to $654.86 billion in the week ended on December 6. After eight weeks of steep declines, the reserves had gained marginally in the previous reporting week. In the preceding eight weeks, the reserves had lost by over $55 billion.

The forex reserves climbed by $1.51 billion to $658.091 billion during the week ended November 29.In the previous week, the country’s forex kitty had fallen by $1.31 billion to $ 656.58 billion. India’s forex reserves had dropped a record $17.761 billion to $ 657.89 billion in the previous reporting week ending November 15. The reserves, which had hit an all-time high of $704.885 billion in end-September, have been declining for multiple weeks.

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Forex reserves, or foreign exchange reserves (FX reserves), are assets that are held by a nation’s central bank or monetary authority. It is generally held in reserve currencies, usually the US Dollar and, to a lesser degree, the Euro, Japanese Yen, and Pound Sterling.

The foreign exchange reserves of the country comprise of foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs) and the country’s reserve position with the International Monetary Fund (IMF). FCA is the largest component of the forex reserves. It includes the effect of appreciation or depreciation of non-US currencies like the euro, pound, and yen held in the foreign exchange reserves.

Foreign Currency Assets (FCA) fell by $3.22 billion to $565.62 billion dollars during the week ended on December 6. Gold reserves displayed a marginal decline of $43 million to $66.94 billion. Meanwhile, Special Drawing Rights (SDRs) increased by $25 million to $18.03 billion.   The reserve position with the International Monetary Fund rising by $12 million to $4.27 billion.